Opposition to Health Insurance Across State Lines

Republicans working to reform the nation’s healthcare law may run into unexpected opposition to their intention to allow health insurers to sell policies to consumers across state lines. For some time, Republican leaders have proposed interstate sales of insurance in order to lower costs by enhancing competition...

December 8, 2016

Republicans working to reform the nation’s healthcare law may run into unexpected opposition to their intention to allow health insurers to sell policies to consumers across state lines. For some time, Republican leaders have proposed interstate sales of insurance in order to lower costs by enhancing competition. The approach is one of the few specific measures mentioned on the transition website of President-elect Donald Trump.

The initiative is expected to be led by Representative Tom Price, the chairman of the House Budget Committee who has been nominated by Trump as Secretary of the Department of Health and Human Services (HHS), and who has spoken in support of interstate sales. State insurance regulators and officials of the industry have in large rejected the idea. Opponents question the feasibility of the approach. “That sounds like a silver bullet to solve a major problem, and there are no silver bullets,” said Republican Louisiana Insurance Commissioner Jim Donelon. “There are no simple answers.”

State officials argue that sales across state lines would cut against the Trump transition team’s pledge to bolster states’ traditional role in regulating the insurance industry and to dial back federal powers unleashed by the Affordable Care Act. The NAIC concludes that while some consumers could find cheaper plans under in-state health insurance sales proposals, payers would most likely seek regulations that allow them to cherry pick the healthiest patients.